Table of Contents

10 Steps to Implementing a Performance Management System

Performance management software
Table of Contents

Performance management has evolved and become more efficient during the last few years. Most of these programs leave a bad taste in the mouth and be a reason for attrition. But organizations have worked around ensuring that the process is more efficient and robust.

There are several reasons that performance management must be effective, and the most crucial factor is that it relates to people, and which makes it more important

What is a performance management system?

A performance management system is a process that helps organizations to evaluate the performance of an individual and their contribution to the organization. It helps in monitoring the goals and their progress. This process helps in sharing feedback and understanding the learning requirements of an individual.

An extremely critical process that requires constant updates and improvements. Organizations spend time streamlining this process and continue introducing new methods to make the process more bias-free and transparent.

Benefits of the performance management system

There is the various way in which a performance management system benefits individuals and organizations. Some organizations conduct bi-yearly, and some follow the yearly process. The outcome of the program helps in

1. Compensation

The foremost outcome of the process is to help organizations and managers to understand the performance of an individual and how to reward him for the contributions made by him. This is mostly done through salary revision and the revised salary becomes the new and increased compensation for an employee.

2. Motivation

Another key influence of the process is that this motivates the employees to do better and gives feedback to understand the gap between what is expected and what is delivered.


3. Organizational goal view

The process gives a clear picture of where my organization is traveling and what are their expectations vis-a-vis where am I currently.

4. Learning Needs

Evaluating an individual on a defined process helps to understand the learning requirements of the role he/she is performing. This help in designing the training needs of an individual.

10 steps to implementing a performance management system

Performance management software

1. Design the process

It is vital to design the process efficiently as this reflects the culture of the organization. The best-suited process is aligned with the culture and helps employees to adapt easily.

While creating such a process it is important to understand the current process or the expectations from the key stakeholders and the employees.

The process is set to be successful only if it adopted organization-wide. Hence the mandate is to design the right program that suits all employees

2. Communicate the plan

Yet another important milestone is to communicate the process of performance management to everyone involved. This is key because the ambiguity may cause a lot of conflicts later on

Employees should understand why such a process is introduced and when and how are they expected to complete the process. There should be a step-by-step guide to follow the process as uniformity is critical to this.

Communicating the organizational goal is important to set the context for setting the department’s expectations and the individuals.

Performance management software can help you to launch such programs seamlessly.

Give people access to

  • The purpose of the program
  • Benefits of the program
  • What are the expectations
  • Where can they access information
  • How that impacts performance

3. Get buy-in

If any new initiatives are launched without buy-in, we can consider that the resistance will be high in adoption. To prevent that there must be a buy-in for the initiatives made. Buy-in will make the individuals and managers own the process

4. Embed the culture

A program that closely resembles and aligns with the culture of the organization is a sure winner. While we walk the talk it is easy to convey the value and the expectations

Connect the program with employee dialogue and engagement. Performance management software helps you to get this done with ease.

5. Plan a test drive

Before we do an org-wide launch it is important to launch it to a pilot group to take the feedback and add the improvements. This will also help you to understand the employee pulse as the pilot group represents the larger audience.

6. Leadership Behaviour

Leadership behavior in the process is important and the entire process is dependent on how they see the process. The adoption of the Performance management system is the top priority, and it is driven by the leaders themselves.

7. Monitor and track

The performance management system must be monitored and tracked constantly as it should not be a retrospective analysis. While doing this retrospective analysis the time lost cannot be justified. So constant monitoring and tracking keep the process successful.

8. Keep it simple

The process set must be simple and in one place. If the process itself is complex and people must visit multiple places to complete their reviews, it becomes exhaustive and cumbersome. This may be one of the reasons why the process may fail. Keeping it simple is the key to success.

9. Feedback and conversation

Adding feedback and conversations to the process adds more credibility and creates a feeling of trust. Trust among team members should be always high. Keeping the conversations around the performance helps us in course corrections and ratify what is right.

10. Iterate constantly

Once the process is rolled out it is not the end of the plan it is the beginning of an interesting and insightful journey. The data and insights obtained by the process help organization make decisions on talent acquisition. This helps us understand where we stand on our skills and competence as a team. The process must be iterative to ensure that the gaps are filled at the right time


Launching a new performance management system also calls for software adoption. Many tools help you implement your methods smoothly and increase the adoption and success rate of the process. At Datalligence, we design your performance management system that will match your culture and eliminate bias. Our employee engagement module helps you track feedback and conversations. Keep all your interactions on business and people performance in one place. Talk to our domain experts today to design a performance management system that is aligned with your organisation’s vision.

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